Cooper Clinic CEO talks about ‘tension’ with Mercy

Cooper Clinic CEO Doug Babb shed light on the organization’s shifting relationships with Sparks Regional Medical Center and Mercy Hospital at the Fort Smith Regional Chamber of Commerce First Friday Breakfast on Sept. 7, calling one relationship “strengthening” and the other “tense.”

Babb also provided input on his expectations for the Affordable Care Act (ACA), which takes effect nationwide in 2014.

“Cooper Clinic and Mercy, in the 1990s, were very much quasi-partners, and very much working closely with each other, but that’s evolved over time,” Babb said. “The main reason is that HMA and Mercy have different system strategies. HMA wants to work with independent physicians, while Mercy has chosen, and this is not to be critical, to have integrated physicians. In other words, they want physicians to be employees, and that creates tension.”

Because of that tension, Babb continued, “We have been forced to work with Sparks and be as independent as we can, and not to rely just on Mercy. So that relationship has evolved from a partnership to actual competition.”

Cooper Clinics’ independence is starting to pay off.

According to Babb, the organization currently employs 102 physicians and providers and more than 500 employees, making it “the eleventh largest employer” in Fort Smith. It has also turned around a “not good” financial outlook and should be “debt free in three years,” Babb said.

While the relationship with Mercy is still at “47 independent physicians” versus 37 at Sparks, “(the Mercy number) is the same it’s been for quite some time.”

Meanwhile, oncology, orthopedic surgery, and cardiology, “are pursuing a closer relationship with Sparks,” Babb said.

“It’s a competitive landscape, and what we need in our community are more physicians, specialists, and primary care (physicians), because we’ve lost market share to other markets — Little Rock, Northwest Arkansas, Tulsa, Oklahoma City, Springfield. So rather than having providers fighting over a small pie, we need to increase the size of the pie in the medical community, and I move there is a need for more cooperation between all of the providers.”

Following the address, Babb spoke with The City Wire about his expectations for health care in the wake of 2014’s new health care law implementation.

“I think the most negative (complaint) that most patients identify is, it puts the government between the patient and the physician. There’ll be less choice on insurance — types of insurance, types of coverages. You will not necessarily always be able to pick your own physicians as you can today, so that is what some patients view as a big negative. And I say that patients view it as a negative. That is not my opinion.”

Babb continued: “I think that another issue — and I wouldn’t call it a negative — but another issue, is that it changes the forms of reimbursement, and it also changes the forms of service delivery. There are pilots that are going on right now, trying these new reimbursement methods, and they’re not going very well. They’re very complicated and different from fee-for-service. So I think one of the issues is, will the new forms of reimbursement actually work?”

When asked what he believes the health care landscape will look like post-election, Babb isn’t certain how it will differ between a President Obama reelection or a Romney win, but he’s certain of one thing.

“I think change is coming and is already here, regardless of who wins the presidential election, because Medicare is already a major, major cost that has to be addressed in the federal budget. And both Republicans and Democrats are going to have to address that in one form or another. I just think change is coming, regardless of who wins the election. People have personal opinions of who they favor for President, but in terms of how we (Cooper Clinic) are as a business, we’ll be prepared to work with the changes that either administration brings at us.”